Decision

Current regulatory judgement: Bournville Village Trust (29 November 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Bournville Village Trust
• Regulatory code: L0702
• Publication date: 29 November 2023
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement regrades our previous published assessment of Bournville Village Trust’s financial viability from V1 to V2 and confirms its existing G1 grade for governance.

The regulator has assurance that Bournville Village Trust (Bournville) continues to comply with the financial viability elements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. Bournville has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.

Bournville is increasing investment in its existing homes which is weakening its interest cover. Its business plan includes increasing revenues from non-social housing activities which exposes it to further risks. These factors, set in the context of economic pressures including inflation and interest rates, impact on Bournville’s capacity to respond to adverse events.

The regulator’s assessment of Bournville’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. On the basis of the Stability Check, the regulator has concluded that there is no evidence to indicate a change to Bournville’s current governance grading.

Other providers included in the judgement

Bournville Works Housing Society Limited

About the provider

Origins

Bournville is the group parent and an unincorporated registered charity. Bournville was established in 1900 and delivers a wide range of services alongside its general needs social housing, including estate management, commercial lettings and market rent activities.

Registered Entities

Bournville has one registered subsidiary, Bournville Works Housing Society Limited, a community benefit society owning 313 properties in Bournville.

Unregistered Entities

There are three unregistered entities in the group:

• Bournville Almshouse Trust manages 97 properties, 33 of which are almshouses;

• Bournville Village Developments Limited is the group’s development company; and

• Bournville Village Enterprises Limited undertakes market rent activities in the group.

Geographic Spread and Scale

Bournville manages around 3,700 homes located in Birmingham and Telford and Wrekin.

Staffing and Turnover

The group employs 212 full-time equivalent staff. Group turnover for the year ended 31 December 2022 was £27.4m.

Development

Bournville plans to develop 67 social rent homes by 2025.

About our judgements

Key to Grades

Governance:

	Compliant
G1	The provider meets our governance requirements.
G2	The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.

	Non-compliant
G3	The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
G4	The provider does not meet our governance requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Viability:

	Compliant
V1	The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2	The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.

	Non-compliant
V3	The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
V4	The provider does not meet our viability requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Note: The use of an asterisk (*) against a grade indicates that the assessment refers to a provider that is designated as being for-profit.

Definitions of Regulatory Routes

In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.

Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.

Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.

For further details about these processes, please see Regulating the Standards.